Smart City barred from accessing key federal funding

Smart City has had a major funding source cut by the Federal Government
Smart City has had a major funding source cut by the Federal Government

A SUNSHINE Coast-based national training college has had a major funding source cut off by the Federal Government amid a string of controversies.

SmartCity Vocational College posted on its Facebook page this afternoon that the Federal Department of Education had notified the college it was no longer able to train students under the VET FEE-HELP government loan scheme effective immediately.

The College, directed by Sunshine Coast businessman Jim Spong, had been at the centre of a number of controversies in the past few months, after its administrative arm SC Admin Pty Ltd went into voluntary liquidation on December 16, last year.

When it went into liquidation hundreds of staff were sacked around the country and were left owed up to $2.6 million in annual leave and other entitlements.

The College shut its doors for about a month before reopening at a reduced number of sites around the country in late-January this year.

The Australian Skills Quality Authority had intended to de-register the college on March 6, but a stay of decision was granted after SmartCity appealed the decision, with the de-registration left pending the outcome of a review by the Administrative Appeals Tribunal.

The Daily previously revealed SmartCity had paid about $9 million in bonuses to shareholders and associated trusts in the 2014-15 financial year, about 18 months before SC Admin Pty Ltd, also directed by Jim Spong, went bust.

The College earned about $80 million in two years from the Federal Government through student loan funding.

This afternoon's Facebook post by SmartCity said the college would continue to provide "training and support for our certificate programs", but it would not offer further training for diploma students who had been studying with VET FEE-HELP financial assistance.

"Despite our best efforts to ensure minimal disruption to our diploma students, this sudden decision means we must cease training immediately," the post reads.

"We have been instructed that ACPET will be communicating options to our students moving forward and working to provide alternative providers to conclude current courses through.

"While many training providers chose to liquidate their companies, when the Government introduced sudden changes, with large cash-flow implications to our industry, SmartCity Vocational College, has been striving to undertake a very difficult restructuring process."

In a further statement to employers and industry partners, Mr Spong said the reason they were no longer able to train students "has nothing to do with the quality of our courses or training, or any compliance issue or poor practice", rather, that it had been due to the college not being given the chance to renew its tuition insurance with ACPET.

Mr Spong said the college's current tuition insurance was valid until March 31, and they had been confident of securing long-term insurance or demonstrating it had sufficient arrangements in place to cover all VET students.

"We would have provided this evidence had we been given the chance to do so before having our funding licence removed, on 21 March 2017," he said.

SmartCity reopened in a reduced capacity on January 26, cutting its number of campuses, but retained a presence in Cairns, Townsville, Rockhampton, Bundaberg, Hervey Bay, Maroochydore, North Lakes, Toowoomba, Fairfield, Elizabeth (South Australia), Armadale (Western Australia) and Hobart (Tasmania).

A spokesman for the Federal Department of Education and training said the government wanted to make sure students at Smart City could transfer to another organisation. 

"The department has revoked the VET FEE-HELP approval of Smart City for non-compliance with the Higher Education Support Act 2003. The revocation took effect from 20 March 2017," the spokesman said.

"Smart City was aware of the department's interest in their operations and was given multiple opportunities to address concerns the department had with their operations.

"The Government is first and foremost concerned about ensuring students are supported to transfer to a new provider to complete their course, or receive a refund of the tuition fees for study commenced but not yet completed.

"ASQA has also made a decision to cancel Smart City's RTO registration. Smart City has applied to both the Administrative Appeals Tribunal and Federal Court for review of the cancellation decision. The AAT has granted a stay of ASQA's decision pending the outcome of the review.

"Smart City was given provisional approval for VSL, but was unable to enrol students until tuition assurance was arranged and ASQA issues were resolved. Smart City's revocation as a  VET provider means that it has also been revoked as a transitionally approved VET Student Loans course provider.

"The VET Student Loans program, with its strengthened provider eligibility and compliance provisions, will restore confidence in the VET system. Appropriate compliance action will be taken against those providers who try to take advantage of students.

"Affected staff of closed providers can get assistance through the Department of Employment's Fair Entitlements Guarantee and jobactive network to get new jobs and receive their entitlements.

"In ceasing VET FEE-HELP, and replacing it with VET Student Loans, the Government is providing financial support for genuine students to get the skills they need from quality providers in courses that are aligned to workplace needs; protecting students and taxpayers; and restoring integrity to Australia's VET system and the reputation of quality training providers."

ACPET provides tuition assurance to support students with VET loans (VET FEE-HELP or VET Student Loans) and will support students with their options at this time. They can be contacted at or on 1800 657 644. Any student affected by a course closure can also contact the Department on 1800 020 108.

Topics:  editors picks smart city

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